Employment Law Update for 2017

The beginning of the year is a great time to review your workplace policies and make sure they comply with the new employment laws in California for 2017. Some of these new laws include the following:

California Fair Pay Act Expands to Include Race and Ethnicity.

The California legislature has expanded the Fair Pay Act to include protections on grounds of race and ethnicity. The language of the new law prohibits employers from paying “employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Note that this language mirrors that of the gender-related protections of the California Fair Pay Act.

In addition, AB 1676 now prohibits employers from relying on an employee’s prior salary to justify salary gaps among similarly-situated employees. The Legislature is concerned that allowing employers to justify a salary gap based on prior salary would adversely affect female candidates who may have had a lower prior salary for various reasons. Employers can inquire about prior salary history, but they may not rely on it entirely to justify a wage difference between employees of different genders or different ethnicities who perform substantially similar work.

As we recommended previously when the law applied only to pay differences between men and women, it is critical to document the legitimate reasons for salary gaps between similarly-situated employees who perform substantially similar work. Before you can do that, of course, you need to understand whether there are any pay gaps in your company. Smaller companies who are making this determination on their own should err on the side of finding a pay gap and documenting the reasons for it. Larger companies or companies with more resources may want to consider hiring a third-party auditor to conduct company-wide reviews of their payroll.

State Disability and Paid Family Leave Increases.

California's State Disability Insurance (SDI) and Paid Family Leave (PFL) programs currently provide only 55% of wage levels for six weeks to allow workers to bond with a child or provide caregiving for a sick relative. AB 908 revises the formula for determining benefits available for both SDI and PFL and would raise the weekly benefit amount for periods of disability commencing on January 1, 2018, to either 60% or 70% depending on income. Effective January 1, 2018, AB 908 also removes the seven-day waiting period for these benefits.

Although these new provisions do not directly affect employers, they are helpful to understand when dealing with an employee on leave. Companies in San Francisco should also be aware that employers with 50 or more employees are required to provide supplemental compensation to employees who use California paid family leave (PFL) benefits for new child bonding. This new requirement, the Paid Parental Leave Ordinance, went into effect on January 1, 2017.

Ban the Box Expands.

California Labor Code Section 432.7 currently prohibits most employers from asking a job applicant to disclose information about an arrest or detention that did not result in a conviction. Employers are also banned from using such information as a factor in connection with employment.

AB 1843 expands this prohibition to include any information concerning or relating to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was under the jurisdiction of a juvenile court.

This latest law reflects the trend of limiting an employer’s ability to find out about a person’s criminal history at the time the person is applying for a job. However, it is worth noting that employers in California may consider a criminal conviction if it is relevant to the job. For example, an employer could ask about drug convictions for job applicants who, if hired, would have access to drugs and medication.

San Francisco employers face even more stringent laws about criminal background checks. The Fair Chance Ordinance prohibits San Francisco employers with at least 20 employees from inquiring about a job applicant’s criminal history on an employment application, including “checking the box” to indicate criminal convictions or other criminal justice system involvement when they apply for a job. Los Angeles also recently adopted a similar law, the Los Angeles Fair Chance Initiative for Hiring.

The laws surrounding an employer’s obligations in this area can be complex, and we frequently counsel our clients about what they can and cannot do when it comes to a job applicant or an employee’s criminal history.

Employment Contractual Provisions on Forum and Choice of Law Change for Out-of-State Employers.

Under a new law, employers cannot require an employee who primarily works and lives in California to agree to adjudicate employment disputes outside of California or to waive the protections of California law as a condition of employment.

This change in the law will impact out-of-state employers who require their California employees to sign employment contracts providing that a different state’s laws will apply to a dispute.

Single-User Restroom Labeling Required.

Beginning on March 1, 2017, business establishments must identify all single-user toilet facilities as "all-gender." The new law authorizes inspectors, building officials, and other officials to inspect for compliance with these provisions.

Notification of Rights for Victims of Domestic Violence, Sexual Assault, or Stalking

Existing California law requires employers with 25 or more employees to provides protected leave for victims of domestic violence, sexual assault, or stalking to take time off from work for specific reasons related to their situation of domestic violence, sexual assault, or stalking. Such reasons include seeking medical attention for injuries caused by domestic violence, sexual assault, or stalking; obtaining services from a domestic violence shelter, program, or rape crisis center; obtaining psychological counseling related to an experience of domestic violence, sexual assault, or stalking; or to participate in safety planning and other actions to increase the employee’s safety from future domestic violence, sexual assault, or stalking.

AB 2337 requires such employers to provide notice of these rights in writing to all new employees and to existing employees upon request. This bill requires the Labor Commission, on or before July 1, 2017, to develop a form for employers to use for such notification purposes. Employers are not required to comply with this notification requirement until the Labor Commission posts this form on its website.

Author: Beth Arnese, Partner

Please contact the Maier Law Group at info@maierlawgroup.com if you would like to speak with one of our experienced employment lawyers about revising your employment policies.

This article has been prepared for general informational purposes only and does not constitute advertising, solicitation, or legal advice. If you have questions about a particular matter, please contact the Maier Law Group directly.